Business Handling Marijuana and Other Regulated Services

Since the initial criminalization of cannabis, marijuana advocates have fought for legislation that allows it in various contexts. States such as New Mexico, California and Oregon have legalized it for medical use within their state, but federal laws and the majority of state laws still make it illegal in most of the country. Marijuana and other controlled services must still abide by regulations, so you should become familiar with the regulations in place if your business involves any of these elements.

What Types of Businesses are Regulated Most?

Marijuana farms and dispensaries are, of course, some of the most strictly regulated businesses. There are several other business services that will likely receive attention from authorities, too, though. If you are involved in any of the following lines of work, you may have to pay special attention to the laws that concern your endeavors:

•Farming and dispensing cannabis

•Selling Liquor

•Adult entertainment

•Smoking paraphernalia

The regulations for these businesses are sometimes similar to those imposed on the cannabis industry, but dispensaries and growers usually face the most stringent regulations. If you are exploring business in any of these sectors, what should you know? You will typically be held to standards imposed at the local, state and federal levels. In some cases, especially with the evolution of marijuana legislation, regulations at different levels may be contradictory. Safely operating within legal parameters requires that you become familiar with all of the standards that may apply to your operation and their potential effect on your business.

Obtaining Licensing for a Highly Regulated Business

One of the first steps to properly establishing your business is determining what licenses are needed. In addition to typical business licenses, highly regulated sectors are generally required to obtain specialized licenses or maintain registration that may entail additional training and documentation. You usually will not have to be licensed by a federal agency, but you will likely have to complete registration with both state and local regulatory agencies. Initial licensing and registration will need to be renewed periodically, so you should always keep track of expiration dates.

Additional Fees Associated With Highly Regulated Businesses

Additional regulation means additional resources are expended by the government agencies tasked with keeping your business in line. Unfortunately, you will often pay for a portion of the regulations being imposed. Some of the costs you might expect include the following:

•Application fee: The aforementioned licenses are typically granted after the submission of an application, and application fees can range from $500 to $3,000 depending on the specifications of the agency.

•Permit or license fee: If the application is approved, you will have to pony up additional funds to claim your permit or license. This fee is often the kicker. It can range from $30,000 to $55,000.

•Renewal fee: Paying for your permit isn’t a one-time expense, and you will likely have to renew it annually. Doing so may cost $10,000 to $15,000.These rates change and vary depending on your line of business, but the fees themselves typically remain a requirement for businesspeople venturing into regulated industries.

Dealing With Conflicting Legislation and Regulations

One of the biggest challenges facing proprietors in highly regulated industries is the imposition of conflicting laws. While marijuana has remained illegal at the federal level, for example, many states have decriminalized and even legalized it within their own parameters. If your business faces this challenge, there are a few steps you can take to protect it:

•Keep up to date on all developments regarding business standards in your industry

•Consult with a lawyer if you ever have legal questions

•Follow precedents set by others to ensure you do not act outside of convention

•Keep stringent records of all business affairsThough operating a business in a highly regulated field can be challenging, it can also be rewarding and lucrative. With an awareness of these aspects, you can prepare for scrutiny and achieve success.

Legal Disclaimer

The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.